Russia's Lugovoy Law: No Real Change in Sight

Since 2020, Russian courts have regularly relied on the so-called Lugovoy Law to refuse enforcing arbitration clauses agreed by the parties, on the ground that Russian parties cannot obtain justice in international arbitration outside Russia.

It may therefore come as a surprise that, according to recent media reports, in a few recent cases, Russian courts respected the parties' choice of forum and referred disputes to arbitration (namely, Nizhnekamskneftekhim v. Bayerische Landesbank and Court Bailiff and VTB Bank v. JP Morgan Chase Bank N.A. and Others).

On closer examination, however, the details of these cases do not indicate any positive shift in the Russian courts' approach. Rather, they show that the decisions favoured influential Russian parties.

In Nizhnekamskneftekhim v. Bayerische Landesbank and Court Bailiff (Case No. A40‑251326/2025), Nizhnekamskneftekhim filed a claim seeking to invalidate a letter that Bayerische Landesbank had sent to the Russian Court Bailiff.  Ruschemalliance, a Gazprom affiliate, then intervened in the proceedings and, together with Bayerische Landesbank, asked the court to refer the dispute to arbitration – a request the court granted. This is all the more remarkable given that only a few months earlier, in a dispute between Ruschemalliance and Bayerische Landesbank, the Russian courts had sided with Ruschemalliance and refused to enforce an ICC arbitration clause. The decisive factor in this case therefore appears to have been Ruschemalliance's involvement and position.

In the second case, VTB Bank v. JP Morgan Chase Bank N.A. and Others (Case No. A56‑24289/2025), the court upheld JP Morgan's jurisdictional objection – but, as the court expressly noted in its decision , the claimant, VTB Bank, had not opposed the objection. By contrast, in many other cases where VTB Bank contested jurisdictional objections, the Russian courts did not hesitate to reject them.

Both cases therefore suggest that the decisive factor is the position of the influential Russian parties involved. The Russian courts' anti-arbitration approach thus remains unchanged, and foreign parties should continue to factor the risk of parallel Russian proceedings into their dispute resolution strategy.